Owning a condo or a cabin in another state can cause your family to face an ancillary probate if you do not plan in advance. This is a second probate case opened in the state where your other property is located.
Even if a probate is opened in your home state of Tennessee, the separate proceeding is often required to transfer your out-of-state assets. Fortunately, you can keep your property out of probate altogether with the right legal tools.
The challenges of ancillary probates
Ancillary probates are secondary court processes in every state where you owned property before your death. These proceedings usually occur at the same time as the domiciliary probate in Tennessee.
Ancillary probates can be more expensive as your family needs to hire attorneys and pay filing fees in multiple states. It may also delay asset distribution while your executors wait for out-of-state courts to clear titles. A secondary probate can also reduce privacy by making your holdings public in different jurisdictions.
Taking action in advance
You can avoid ancillary probate by creating a revocable living trust. After setting it up, you can transfer your out-of-state property deeds from your name into the trust. Upon your death, your trustees can manage the real estate without going to court.
Another option you have is to use a Transfer on Death (TOD) Deed, which allows you to name beneficiaries who will automatically inherit your vacation home without a probate. However, TOD deeds must follow the state-specific rules of where the real estate is based. Seeking legal guidance can help you ensure the deed is prepared correctly under those laws.
Securing your legacy
Helping your family avoid dealing with a probate is largely about taking action before it is needed. By planning your estate early, you can ensure that your vacation home remains a gift to your loved ones rather than a legal complication.